Hong Kong’s Securities and Futures Commission has authorized Baillie Gifford’s Enhanced Yield Fund, the city’s first fully native tokenized fund for professional investors, the company announced Wednesday.
The Baillie Gifford Enhanced Yield Fund (BAGEY) is an actively managed fixed-income fund invested in short-duration government and corporate bonds. Built with BNY, BAGEY is issued natively on Ethereum and Solana, with investors holding the fund directly onchain and the blockchain serving as the official ownership register.
Eligible investors can subscribe and redeem using fiat currency or USDC, while the fund also supports T+0 redemptions for up to 10% of NAV and provides an indicative NAV for secondary market activity.
According to Baillie Gifford, the launch demonstrates how tokenization can improve investment infrastructure through direct onchain ownership, greater transparency, and operational efficiency without compromising investor protections.
“Tokenization will only matter if it makes finance fundamentally better,” Theo Golden, Head of Digital Assets and Tokenisation at Baillie Gifford, commented on the launch. “Most tokenised funds place a digital wrapper around existing funds, BAGEY is different. Investors hold the fund directly on blockchain, creating a simpler ownership model for increasingly digital financial markets.”
Gifford said the approval reinforces Hong Kong’s ambition to become a global tokenization hub while showcasing how regulated investment products can benefit from blockchain-based ownership, faster settlement, and improved transparency.
“Our ambition is not tokenization for its own sake, but to build investment infrastructure that clients can trust – with cleaner ownership, stronger governance and faster settlement. Same discipline, better rails,” he added.
The UK-regulated OEIC currently offers a portfolio yielding approximately 7% with an average BBB credit rating and a two-year duration. BNY will provide tokenization and wallet services, while NatWest Trustee and Depositary Services will act as the fund’s depositary.
“Tokenization is not a short-term theme for us; we believe it will become part of the mainstream investment infrastructure over time. Our role is to give clients access to this innovation through investment structures that are robust, transparent and built to endure,” Stuart Dunbar, Partner at Baillie Gifford, stated.
